Why maturity mismatch important for understanding bank risk

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Reference no: EM131276297

1. Define maturity mismatch. Why is maturity mismatch important for understanding a bank's risk and analyzing its performance?

2. If a bank increases its maturity mismatch, what happens to its economic spread before taxes and its economic spread after taxes (i.e., including the tax penalty)?

Reference no: EM131276297

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